Bank buys Kluge winery for $19M

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Though rumors traveled in the past few weeks that Donald Trump might make a bid for the 906.6-acre Kluge Estate Winery & Vineyard, as the carriage house near the entrance to Albemarle House, Patricia Kluge’s baronial onetime home, filled with wine industry types, looky-loo real estate agents, and other top-coated business-looking types, it was clear that the biggest thrill at today’s real estate auction was sure to be the presence of Spudnuts and Dunkin’ Donuts coffee on the back table. With a total of seven bidders registering for the auction, there was, in the end, a single bid. Farm Credit of the Virginias, which holds the lien on the property that includes 164 acres of vineyards, a tasting room, staff houses, a barrel cave, various winery buildings, and loads of farm and wine-making equipment, opened the bidding at $19 million. And that’s where it stayed, despite sing-song imploring by the auctioneer to raise the bid by at least $100,000.

More after the photo.

Chip Saufley, Regional Lending Manager for Farm Credit of the Virginias, closes the deal on the lender’s $19 million bid on Kluge Estate Winery & Vineyard this afternoon.

Within 15 minutes, an important chapter in Virginia’s wine story came to a close. Kluge, who with her husband, Kluge Estate Winery’s CEO Bill Moses, advanced a worldwide strategy for her wines that included everything from so-called flying winemakers (the controversial Frenchman Michel Rolland whose detractors can be seen in the film Mondovino) to sales in China, was in the end shut down by a creditor that wanted payment on its $34.8 million line of credit, thank you very much, without regard for whether New World Red would in fact conquer the planet.

The mood was dour. "I’m kind of in mourning," said local distributor Pamela Margaux, whose husband, Claude Thibaut, is widely considered to have been Kluge’s best sparkling winemaker. "There’s no love lost between us," she said of Kluge, "but I am sad for the Virginia wine industry."

Matt Conrad was in from the state department of agriculture, he said, to let any potential buyers know, "the state has an interest in seeing this kept as a working vineyard and winery."

When the auction closed, William Shmidheiser III, the acting trustee, responded to that sentiment. "If the state has a strong interest in it, that’s nice. If the interest is supported by money, that would be helpful," he said.

Shmidheiser added that the bank will continue to look for a buyer.

The Kluge deathwatch continues this Saturday in Madison County, where some 15,000 cases of warehoused wine dating back to 2004, will be auctioned. Bidders must have a valid ABC license.

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